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I want to replace my AC motor (70 KW, 50 hz, 415 V) with VFD motor (60 Hz) to increase my compressor capacity by 20%, and speed will be changed from 980 to 1120 RPM. Is it required to replace motor or can it be done in this motor itself? If so, please give me details how it can be possible.

You need to check the size of your existing motor against the new load, because increasing capacity means increasing load. If it turns out that your existing motor can still take on the new load with sufficient safety margin, then you can still use it for your new VFD. Of course, your VFD must match the power requirement at the new load.